Even if you hire a bookkeeper to track cash flow and expenses for your small business, it’s still important to stay informed when it comes to your business’s Profit and Loss statement and accounts payable. Of course, some accounting software can make keeping track of your business’s money easier than others.
Here are 5 accounting programs for small businesses that will take the pain out of money management.
FreshBooks was designed with the small client-service business in mind. If you need to send invoices to bill clients for your time, expertise, or items sold, this software is for you. If you’re in the market for full-service accounting software, then another software may better suit your needs.
- Great for sole proprietors or freelancers that need a flexible and functional invoicing solution based on items or time
- Thorough invoice status tracking so you know whether an invoice has been sent yet and whether the customer has viewed it, plus if an invoice is overdue, or has been partially paid or fully paid
- Simple and easy cloud-based software solution to track income and expenses
- Create client projects and track time spent; parlay the information into invoices
- Ability to add multiple staff members who need to invoice their services
- Set up gateways to accept credit cards and other payments
- Award-winning customer service available 8AM to 8PM Eastern, Monday through Friday
- The most prevalent complaint among users is that FreshBooks shouldn’t bill itself as accounting software when it can’t accurately produce profit & loss and balance sheet reports without entering most of the data manually
- Does not track payroll, assets (a savings account, for example), liabilities like loans, or equity like owner contributions, so a complete financial snapshot of the business using FreshBooks isn’t feasible
- Difficult to accurately reconcile your bank account with your FreshBooks data without manual adjustments
- There’s no accounts payable, which means you can’t track your own unpaid bills using FreshBooks
After a free, 30-day trial, FreshBooks offers several subscription tiers that range in price from $19.95 per month to $39.95 per month.
2. Intuit QuickBooks Online
Business News Daily ranks Intuit QuickBooks Online as the best accounting software for small businesses. The software offers comprehensive accounting features designed for both new and established businesses.
Intuit QuickBooks Online Pros
- Performs most accounting tasks, like expense tracking, bill pay, recurring invoices, and data synch across financial accounts
- Easy setup, intuitive user interface and navigation; its many features and functions are arranged to avoid overwhelming new users
- Provides comprehensive accounting reports, including balance sheet, cash flow, profit & loss, accounts receivable and payable; allows you to compare your business performance to similar businesses
- Can track inventory, plus offers basic inventory accounting reports
- Import customers from Outlook, Excel, and Gmail, and/or manually create customer accounts
- Set up gateways to accept credit cards and other payments
- For a fee, you can add payroll services to your Intuit QuickBooks Online account; payroll service includes tools to create paychecks; calculates payroll taxes, reminds you when they’re due, and allows you to you print, sign, and send payroll taxes
Intuit QuickBooks Online Cons
- Unlike the desktop version of the software, the cloud-based QuickBooks Online does not integrate with QuickBooks Point of Sale features and doesn’t support QuickBooks Bill Pay
- Difficult to customize invoices and less flexibility to customize forms or reports as compared to QuickBooks desktop version
- A visible “pay now” button your customers can see on electronic invoices, regardless of whether you accept online payments
- User permissions aren’t adjustable; an employee granted access to the account can access confidential information such as the billing rate of other employees
After a free 30-day trial, QuickBooks Online offers three subscription tiers that range in price from $12.95 per month to $39.95 per month.
3. Sage One
Sage One is designed with the mom-and-pop shop, freelancer, or very small startup in mind. Sage One offers an automated invoicing service plus an accounting service. You can sign up for invoicing only, or if you choose the standard accounting software, then invoicing comes bundled with it. Pros and cons listed below are for the standard accounting version.
- Allows tracking of income, bills and expenses, projects and tasks, billable hours, and inventory
- Easily customize invoices and track payment statuses of invoices
- Offers online payment processing using PayPal or Sage’s payment solution (services vary by location)
- Automate standard accounting reports such profit & loss and balance sheets
- Synchs with your bank account for easy transaction tracking
- Simple interpretation of accounting software made for small businesses that don’t need the same complicated features as larger companies
- Add-ons, such as payroll services, are location dependent
- Pared-down functionality limits customization
- Contacts can only be added manually or by importing them from a CSV file
- Not for companies with complex inventory tracking needs or large numbers of employees.
It’s only $14 per month for the full-price accounting package.
4. Wave Accounting
Wave Accounting is for entrepreneurs, freelancers, consultants, and small businesses with 9 employees or less. Wave handles accounting, reports, and creating and sending invoices. It’s best known for offering its software for free.
- Free, AND has responsive customer support by email
- User-friendly dashboard provides simple financial reports
- Supports more advanced accounting features like double entry accounting, modification to the Chart of Accounts, and the creation of Journal entries
- Wave Accounting integrates with Payroll by Wave
- Supports multiple sales tax levels and multiple currencies
- Allows downloads of recent bank transactions to reduce manual entries; categorization of bulk transactions
- Billing integration with Stripe merchant
- Some complain that Wave provides only basic reports
- Ads that support Wave’s free pricing distract may from the data
- Wave works strictly on the accrual basis of accounting. If you need cash basis financials for tax reasons, your tax accountant can convert accrual basis to cash basis financials
- No cost accounting modules or income statements by revenue stream
Accounting and reports and creating and sending invoices are free.
5. Zoho Books
Zoho Books provides complete accounting tools for small businesses that don’t need to manage a lot of inventory. Business News Daily calls Zoho Books the best accounting software for microbusinesses, such as sole proprietors, freelancers, consultants, artists, and online and home-based businesses.
- Easy set-up; clean layout and intuitive user dashboard
- Good number of accounting features for the price; simple yet comprehensive; affordable for the small business owner
- Create unlimited invoices and add unlimited customers and vendors; plus multiple currencies, projects and users; all features for a flat rate as opposed to competitors who upcharge
- Automates repetitive tasks like sending invoices, recurring billing, tracking expenses, and payment reminders
- Ability to quickly create custom invoices; can email invoices, convert them to PDF, or Zoho will mail invoices to your clients for a fee
- Integrates with payment gateways Google Checkout, PayPal, and Authorize.net
- Track expenses, time, clients, payments due, vendors, account balances, and overdue invoices
- Provides traditional accounting features and reports, such profit & loss statements and journal reports
- To utilize project tracking tools, you must use Zoho’s separate Projects product for an additional monthly fee; features of Projects are limited
- Customer service is available 24-hours per day by phone and email, but only five days per week; getting hold of a live rep can be difficult; you may need to leave a voicemail and wait for a call back
- Integrates with scant few third party apps, instead pushing Zoho’s own suite of business apps
- Does not support payroll services
Zoho offers a free 14-day trial and then a single service plan at $24 per month for one organization.